Crypto mining operator Core Scientific goes public through SPAC

Cryptocurrency mining operator Core Scientific announced on Wednesday that through a merger with Power & Digital Infrastructure Acquisition Corp. listed on the Nasdaq.

The deal with the special purpose vehicle is valued at Core Scientific at around $ 4.3 billion.

It is not clear when trading will start. The ticker name was not disclosed.

With offices in North Dakota, North Carolina, Georgia and Kentucky, Core is one of the largest providers of blockchain infrastructure and hosting, as well as one of the largest digital asset miners in North America.

Competing bitcoin miners Riot Blockchain and Marathon Digital have market caps of $ 2.18 billion and $ 2.25 billion, respectively.

“Core’s blockchain infrastructure business is unparalleled and backed by more than 70 blockchain and infrastructure-related patents and applications,” said Darin Feinstein, co-founder and co-chair.

Bitcoin had a wild year peaking more than $ 63,000 before crashing to a current value of around $ 31,500, but it’s still up over 245% from a year ago. Bitcoin mining company SPACs are another way of betting on the crypto craze with a slightly longer time horizon than speculating on the currencies themselves.

Core, which primarily mints Bitcoin, claims to have had sales of $ 60 million in 2020 and is expecting $ 493 million this year. The company declined to disclose any net profit or loss.

In 2021, Core has minted more than 3,000 Bitcoin, including 1,683 for its own account, Co-Chairman and CEO Mike Levitt said in an interview. During the same period, Marathon’s mining fleet produced approximately 846 bitcoin and Riot produced a total of 1,167.

Core is expanding capacity at its existing locations and intends to build additional facilities in possibly one or two additional states. It operates about 80,000 oil rigs and will operate well over 300,000 miners by the end of 2022, according to Levitt.

“We’re all sold out. Every bit of infrastructure we can build – and we are the largest – we have demand, ”said Levitt. “We’re basically sold out by 2022 and we’re building more.”

Levitt, who invested in data centers during his private equity stint in the 1990s, said Core’s business model was much more than building huge warehouses with a bunch of computers running around the clock.

One project is called “What to Mine”. The AI-supported program developed by Core optimizes mining across the various Bitcoin derivatives in order to achieve the greatest return on the network at this point in time.

Core plans to pour $ 300 million in net cash back into the company to fund growth.

Critics say that cryptocurrency has a negative impact on the environment due to its massive energy consumption. It’s a concern that Core has prioritized since its inception. The company operates a 100% carbon neutral business, with 56% of its electricity coming from sustainable sources including solar, wind, hydro and nuclear. The company buys CO2 certificates to offset the rest.

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